Saturday, March 16, 2013

The great economist Armen Alchian died recently aged 91. His contributions in the field of property rights were especially brilliant. This for example:

One of the most fundamental requirements of a capitalist economic system—and one of the most misunderstood concepts—is a strong system of property rights. For decades social critics in the United States and throughout the Western world have complained that "property" rights too often take precedence over "human" rights, with the result that people are treated unequally and have unequal opportunities. Inequality exists in any society. But the purported conflict between property rights and human rights is a mirage. Property rights are human rights.

The definition, allocation, and protection of property rights comprise one of the most complex and difficult sets of issues that any society has to resolve, but one that must be resolved in some fashion. For the most part, social critics of "property" rights do not want to abolish those rights. Rather, they want to transfer them from private ownership to government ownership. . . .

Any restraint on private property rights shifts the balance of power from impersonal attributes toward personal attributes and toward behavior that political authorities approve. That is a fundamental reason for preference of a system of strong private property rights: private property rights protect individual liberty.

From Armen A. Alchian's "Property Rights" in "The Concise Encyclopedia of Economics" (2008)

Numerous of today’s confusions and “expectational” policy making along with the resulting damage arise through failure to understand these points.